TAX UNDER GIFT OR TRANSFER THROUGH WILL

Dear Bhabeshji,

the simplest way is that your mother should transfer the property to all of ur family members & then by a deed transfer those share of property in your name & then pay the amount to ur transferer family members

Thanks

Debashis

i have gifted a immovable property to my wife in the FY-2006-07, Asst-2007-08,i was getting rent from this property and i have declared the income  in my IT returns till Fy-2005-06.  i have a small business of cement bags ( sale & purchase).

now i have been called for scrunity by the ITO, the ITO has told me that the above property from which i was getting Rent, i can not gift the property to my wife & he want to add the rental income to my income instead of my wife for the year FY-2006-07 . now i want to know why i cannot transfer the property to my wife's name, in which IT section can i Tell him that the property can be transfered to my wife's name. i have filied the "IT" returns of my wife declaring the above rental income.

regards

barkat

Respected Friend Mr. Barkat Ali,

after studing your point - it is absolutely clear that, there is no law which can make your gift to your spouse illegal, so from my point of view your gift to your wife is absolutely valid in law if proper documentation etc. has been done, but as per Income Tax act. 1961 clubbing provision the income which is generated from such assets of property is to be clubbed with your income & not with the income of your wife. so here is the point of argument with your ITO, but in no situation your ITO can say you that you cannot gift your assets to your wife.

Thanks

Debashis

Hi friend Mr. Barkat Ali, If you transfer a property to your spouse unless than for adequate consideration or an agreement to live apart, the income from such property will be taxable only in the hands of the original owner. Refer section 27(i).  If you can prove the assessing officer that you have transfered the house property to your wife for adequate consideration (Market value) or for an agreement to live apart, then it will not be taxable in your hands.  Hope i am correct... Refer the above section once.